EU looking 'closely' at UPS-TNT deal

Friday, December 07, 2012

The competition arm of the European Commission continues to look “closely” at the UPS’ planned acquisition of TNT Express.
In a speech Thursday at the EU Competition Policy Conference in Brussels, Joaquin Almunia, the commissioner responsible for competition, tried to shed a little light on the EU’s process without sharing too much new information about internal UPS-TNT discussions.
Almunia pledged to analyze the remedies recently proposed by UPS in the coming weeks. “It still remains to be seen whether appropriate solutions will ultimately address our concerns for express-parcel deliveries in Europe,” he said, according to a transcript of the speech.
UPS recently proposed selling off business assets and granting air rights to third parties to ensure the $6.3 billion deal doesn’t die on the vine. Details of how these concessions might be accomplished have not been released by UPS or the European Union. Last month, TNT Express officials announced they would sell two airline holdings, TNT Airways and Panair, to ASL Aviation Group if the European Union decides to let UPS and TNT combine. According to a company press release, ASL, which currently owns Safair, Europe Airpost and Ireland-based Air Contractors, has pledged to keep the current TNT and Panair routes intact. The carrier seems to want to position ASL as a neutral player that can farm out services to customers as needed.
Almunia didn’t elaborate on the merger discussions, taking the rest of his speech to detail how the competition commission does its work and what is likely on the horizon for the group. The commission’s goals include diversifying energy supply for European companies, which will remove what he said some companies have called an unfair foreign energy advantage, and closing corporate tax loopholes. One big step toward these goals is a free trade agreement between the European Union and the United States.
“We have the common objective of promoting open, fair and competitive international markets,” he said, “and a comprehensive free trade agreement would bring that objective closer.”
Finally, Almunia pledged to fine tune how the EU addresses and considers mergers, simplifying the process without sacrificing the safeguards that ensure proper competition.
“To take the road of sustainable growth, Europe needs to launch structural reforms. Everyone agrees on this point,” he said. “Well, competition enforcement is the cheapest and most effective structural reform I can think of.” - Jon Ross